2024-04-10 04:10:06 ET
Summary
- Paul Singer's Elliott Investment Management bought a $1B conviction stake in Match Group earlier this year, and investors could buy at an even cheaper price today.
- MTCH owns almost every leading dating app, is profitable, trades at a discount valuation, and has committed to returning 50% of FCF to shareholders via buybacks in 2024.
- Only 30% of Americans have ever used a dating app, indicating ample runway for growth. Loss of "third places" means daters often have no choice but to rely on apps.
- Other potential catalysts include gross margin expansion from a possible reduction in app store fees and better filtering tools for under-monetized female users.
- Price target: $46.88.
Earlier this year, activist hedge fund Elliott Investment Management, owned by billionaire Paul Singer, reportedly built a $1B stake in Match Group ( MTCH ). Match Group is the most experienced publicly traded operator in the online dating space, with a portfolio of apps including Tinder, Hinge, OkCupid, and Plenty Of Fish, which all rank in the top 10 on the Google Play Store under the "Dating" category. According to HedgeFollow , Elliott reported a $109M MTCH position in 4Q of last year at an average buy price of $37.84, meaning they have since 10x their stake. Match Group stock broke $40 on the day Elliott's stake was announced and has since retreated to the sub-$35 range....
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Match Group Offers A Strong Relationship For Gains